II 

112TH CONGRESS 

1ST SESSION S. 912 

To prevent foreign states that do business, issue securities, or borrow money 

in the United States, and fail to satisfy United States court judgments 

totaling $100,000,000 or more based on such activities, from inflicting 

further economic injuries in the United States, from undermining the 

integrity of United States courts, and from discouraging responsible 

lending to poor and developing nations by undermining the secondary 

and primary markets for sovereign debt. 

IN THE SENATE OF THE UNITED STATES 

MAY 9, 2011 

Mr. WICKER introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To prevent foreign states that do business, issue securities, 

or borrow money in the United States, and fail to satisfy 

United States court judgments totaling $100,000,000 or 

more based on such activities, from inflicting further 

economic injuries in the United States, from undermining the integrity of United States courts, and from 

discouraging responsible lending to poor and developing 

nations by undermining the secondary and primary markets for sovereign debt. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Judgment Evading 

3 Foreign States Accountability Act of 2011’’. 

4 SEC. 2. STATEMENT OF PURPOSE. 

5 The purpose of this Act is to prevent foreign states 

6 that do business, issue securities, or borrow money in the 

7 United States, and fail to satisfy United States court 

8 judgments totaling $100,000,000 or more based on such 

9 activities, from inflicting further economic injuries in the 

10 United States, from undermining the integrity of United 

11 States courts, and from discouraging responsible lending 

12 to poor and developing nations by undermining the sec13 ondary and primary markets for sovereign debt. 

14 SEC. 3. FINDINGS. 

15 Congress finds the following: 

16 (1) Foreign states that do business, issue secu17 rities, or borrow money in the United States, and 

18 refuse to satisfy judgments of United States courts 

19 entered against them in connection with disputes re20 sulting from these or other commercial activities— 

21 (A) directly or indirectly inflict billions of 

22 dollars of damage in the United States; and 

23 (B) undermine the credibility of United 

24 States courts. 

25 (2) Foreign states that engage in the behavior 

26 described in paragraph (1) can infect the manageVerDate Mar 15 2010 03:35 May 10, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S912.IS S912

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1 ment of corporations and other entities that they 

2 own or control with their profligate and irresponsible 

3 habits. When negligent ethical standards permit gov4 ernment officials to repudiate lawful judgments, the 

5 injury to United States taxpayers is multiplied. 

6 (3) The Republic of Argentina is a primary ex7 ample of a foreign state that has incurred large 

8 debts in the United States, defaulted on those debts, 

9 and refused to honor lawful judgments of United 

10 States and other courts ordering repayment. In 

11 2001, Argentina defaulted on more than 

12 $81,000,000,000 in sovereign debt, the largest such 

13 default in history. In 2005, after refusing all efforts 

14 by creditors to negotiate the terms of an exchange 

15 offer, Argentina unilaterally offered lenders approxi16 mately 27 cents on the dollar in its restructuring 

17 deal, far below the international norm for sovereign 

18 debt restructurings. Argentina repudiated the debts 

19 owed to the unprecedented proportion of bondholders 

20 who rejected that offer. 

21 (4) Argentina owes United States bond holders 

22 more than $3,500,000,000. The default and restruc23 turing by Argentina have cost United States bond24 holders, taxpayers, and share holders more than 

25 $10,000,000,000. 


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1 (5) Argentina has the capacity to pay its exter2 nal creditors. Argentina now holds more than 

3 $54,000,000,000 in reserves. Argentina chose to pay 

4 off its $9,800,000,000 debt to the International 

5 Monetary Fund in full in 2005, years before it was 

6 due, and has similarly announced an intention to 

7 pay sovereign creditors of the Paris Club, of which 

8 the United States is owed $360,000,000. 

9 (6) United States bondholders have won numer10 ous court rulings against Argentina relating to Ar11 gentina’s default on debt owed to such bondholders. 

12 Argentina’s decision to repeatedly ignore these judg13 ments threatens the United States legal system. De14 spite having agreed to submit to the jurisdiction of 

15 the State of New York and to waive claims of sov16 ereign immunity, Argentina is now contesting at 

17 least 170 lawsuits and refusing to honor 100 judg18 ments against it, totaling more than 

19 $7,000,000,000. 

20 (7) Argentina has demonstrated a similar dis21 regard for claims brought by United States investors 

22 before the International Centre for Settlement of In23 vestment Disputes (ICSID), a tribunal of the World 

24 Bank. Argentina is the respondent in more than a 

25 quarter of the ICSID cases, more cases than any 


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1 other nation. Argentina’s arguments for nonpayment 

2 have been rejected by the Department of State and 

3 the ICSID. Argentina is currently receiving 

4 $5,810,000,000 from the World Bank and has re5 quested an additional $1,630,000,000 in funding. 

6 Argentina has behaved in a manner that undermines 

7 the viability of the ICSID process, thereby alarming 

8 the worldwide investments of United States busi9 nesses that rely upon this forum for adjudication of 

10 disputes. 

11 (8) Argentina’s debts are legitimate. Any asser12 tion that the outstanding Argentine debt was in13 curred by the repressive, nondemocratic regimes that 

14 ruled Argentina in the late 1970s and early 1980s 

15 is inaccurate. The bonds currently held by United 

16 States creditors were issued by democratically elect17 ed Argentine governments. 

18 (9) While the Argentine military junta, which 

19 caused tremendous suffering during a tyrannical 7- 

20 year reign, borrowed from foreign banks, 96 percent 

21 of that debt was refinanced in 1993 when Argen22 tina’s ‘‘Brady Plan’’ restructuring was completed. 

23 Before the 1993 restructuring, which was under24 written by the United States Government, Argentina 


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1 had undergone major restructurings of its foreign 

2 debt in 1985 and 1987. 

3 (10) None of the Argentine debt held by United 

4 States creditors originated during the Argentine 

5 military junta. To characterize the debt issued in the 

6 1993 Brady Plan restructuring as derivative of 

7 junta-era debt would malign the United States pol8 icymakers who approved and underwrote the Brady 

9 Plan on behalf of the American people. Ninety-five 

10 percent of the defaulted Argentine debt held by 

11 United States creditors was borrowed after 1993 by 

12 freely elected Argentine governmental officials and 

13 has no relationship to the military junta. 

14 (11) Argentina’s defaults have raised the costs 

15 of borrowing for the public and private sectors. If 

16 the country took action to remediate its debts, its 

17 annual interest expense would decline. Argentina’s 

18 defaults have discouraged foreign direct investment. 

19 A 2007 study estimates that Argentina loses more 

20 than $6,000,000,000 in foreign direct investment 

21 every year as a result of its default and debt repudi22 ation and the resultant risk profile. 

23 (12) An October 2010 evaluation report by the 

24 Financial Action Task Force (FATF), an intergov25 ernmental body that analyzes financial systems for 


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1 criminal activity, found that Argentina is the only 

2 G–20 nation to receive a negative evaluation and 

3 that Argentina failed to meet 47 out of the 49 finan4 cial standards. Argentina was given an original 

5 timeline of 3 months, then an additional 10 months 

6 to demonstrate compliance to the standards or face 

7 being blacklisted due to financial corruption and de8 ficiencies in combating financing of terrorism and 

9 anti-money laundering systems. 

10 (13) FATF reported several shortcomings in 

11 Argentina’s financial sector, most notably corruption 

12 and the poor enforcement of Argentine financial 

13 laws. The lack of enforcement has prompted wide14 spread money laundering in Argentina’s financial 

15 sector creating an environment that places Argen16 tina at risk of becoming a hub for terrorism and 

17 drug trafficking in the Western Hemisphere. 

18 (14) United States citizens— 

19 (A) are generally unaware of Argentina’s 

20 irresponsible behavior and disregard for the rule 

21 of law; 

22 (B) continue to invest in, lend to, and do 

23 business with Argentina; and 

24 (C) are unfamiliar with the associated 

25 risks. 


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1 (15) Those who are injured as a result of this 

2 conduct often have little or no recourse. Judgment 

3 evading foreign states and their state-owned cor4 porations enjoy a safe haven within their national 

5 borders, which often presents an insurmountable ob6 stacle to recovery for those who are injured by the 

7 behavior of those states. 

8 (16) The absence of a remedy for defaults by 

9 such foreign states undermines nations that badly 

10 need to access capital from foreign lenders, with dis11 proportionate harm falling on responsible and demo12 cratic nations. By undermining confidence in the 

13 secondary market for sovereign debt, judgment evad14 ing foreign states significantly increase the risk that 

15 primary lending to less-advantaged nations will be 

16 curtailed, depriving deserving sovereign borrowers of 

17 access to the international capital markets. 

18 (17) Action by the United States Government 

19 to combat this growing problem must include meas20 ures that— 

21 (A) protect against the irresponsible con22 duct of judgment evading foreign states and 

23 their state-owned corporations; and 

24 (B) motivate such states and corporations 

25 to raise their standards of behavior. 


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1 (18) An effective means of achieving the impor2 tant objectives described in paragraph (17), until 

3 those states demonstrate that such measures are no 

4 longer necessary, would be— 

5 (A) to deprive judgment evading foreign 

6 states and their state-owned corporations of the 

7 privilege of issuing securities or borrowing in 

8 the United States; and 

9 (B) to require that warnings of their irre10 sponsible behavior be given to persons in the 

11 United States who are contemplating investing 

12 in, lending to, or doing business with such 

13 states and businesses. 

14 SEC. 4. DEFINITIONS. 

15 In this Act: 

16 (1) AGENCY OR INSTRUMENTALITY OF A FOR17 EIGN STATE.—The term ‘‘agency or instrumentality 

18 of a foreign state’’ has the meaning given that term 

19 in section 1603(b) of title 28, United States Code. 

20 (2) FINAL JUDGMENT.—The term ‘‘final judg21 ment’’ means any judgment of a United States dis22 trict court, the Court of International Trade, or the 

23 court of any State, that is no longer eligible to be 

24 appealed to any court in the United States. 


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1 (3) FOREIGN STATE.—The term ‘‘foreign state’’ 

2 has the meaning given that term in section 1603(a) 

3 of title 28, United States Code, except that it does 

4 not include an agency or instrumentality of a foreign 

5 state. 

6 (4) INTERNATIONAL ORGANIZATION.—The term 

7 ‘‘international organization’’ means an entity des8 ignated by the President as being entitled to enjoy 

9 the privileges, exemptions, and immunities provided 

10 by the International Organizations Immunities Act 

11 (22 U.S.C. 288 et seq.). 

12 (5) JUDGMENT EVADING FOREIGN STATE.— 

13 The term ‘‘judgment evading foreign state’’ means 

14 any foreign state that— 

15 (A) has 1 or more judgments entered 

16 against it by any United States district court, 

17 the Court of International Trade, or the court 

18 of any State that exceed, in the aggregate, 

19 $100,000,000; 

20 (B) fails to satisfy in full any such judg21 ment for a period of more than 2 years after 

22 the judgment becomes a final judgment, regard23 less of whether such judgment became a final 

24 judgment before the date of the enactment of 

25 this Act; and 


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1 (C) is not a foreign state eligible for— 

2 (i) financing through the Inter3 national Development Association, but not 

4 from the International Bank for Recon5 struction and Development; or 

6 (ii) debt relief under the Enhanced 

7 HIPC Initiative (as defined in section 

8 1625(e)(3) of the International Financial 

9 Institutions Act) or the Multilateral Debt 

10 Relief Initiative. 

11 (6) STATE.—The term ‘‘State’’ means each of 

12 the several States, the District of Columbia, and any 

13 commonwealth, territory, or possession of the United 

14 States. 

15 (7) STATE-OWNED CORPORATION OF A JUDG16 MENT EVADING FOREIGN STATE.—The term ‘‘state17 owned corporation of a judgment evading foreign 

18 state’’ means any corporation or entity, other than 

19 a natural person— 

20 (A) that is an agency or instrumentality of 

21 a foreign state that is a judgment evading for22 eign state; or 

23 (B) a majority of the shares or other own24 ership interest of which is held, either directly 

25 or indirectly, by a judgment evading foreign 


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1 state or by an agency or instrumentality of a 

2 foreign state that is a judgment evading foreign 

3 state. 

4 SEC. 5. STATEMENT OF POLICY. 

5 It is the policy of the United States— 

6 (1) to advocate within the governing bodies of 

7 international organizations, international financial 

8 institutions, such as the World Bank and the Inter9 national Monetary Fund, and other foreign policy 

10 settings for the full compensation and fair treatment 

11 of United States taxpayers in whose favor judgments 

12 have been awarded by the United States courts; 

13 (2) to seek to protect the economic interests of 

14 such taxpayers and other persons and of nations 

15 that benefit from a reliable flow of foreign capital 

16 by— 

17 (A) restricting the access to the United 

18 States capital markets of judgment evading for19 eign states and their state-owned corporations; 

20 (B) requiring that such persons be warned 

21 of the dangers of investing in, lending to, or 

22 doing business with such states and state-owned 

23 corporations; and 

24 (C) calling on the World Bank, the Inter25 national Monetary Fund, and other interVerDate Mar 15 2010 03:35 May 10, 2011 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S912.IS S912

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1 national financial institutions to vote against 

2 providing funding or foreign capital to judg3 ment evading foreign states; and 

4 (3) to further solidify the authority of the 

5 United States courts by preventing judgment evad6 ing foreign states from willfully disregarding the 

7 judgments of those courts. 

8 SEC. 6. BAR ON ACCESS TO UNITED STATES LENDERS AND 

9 INVESTORS. 

10 (a) MEASURES WITH RESPECT TO JUDGMENT EVAD11 ING FOREIGN STATES.—The Securities and Exchange 

12 Commission shall— 

13 (1) take all necessary measures to deny every 

14 judgment evading foreign state access to United 

15 States capital markets, including the ability, directly 

16 or indirectly, to borrow money or sell securities in 

17 the United States; and 

18 (2) require that all periodic filings made by the 

19 judgment evading foreign state with the Securities 

20 and Exchange Commission under the securities laws 

21 bear the following legend prominently on the cover 

22 page: ‘‘WARNING: THIS REPORT IS SUB23 MITTED BY A FOREIGN STATE THAT HAS 

24 BEEN DETERMINED BY THE UNITED 

25 STATES DEPARTMENT OF THE TREASURY 


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1 TO BE A JUDGMENT EVADING FOREIGN 

2 STATE BASED UPON ITS FAILURE TO SAT3 ISFY OUTSTANDING UNITED STATES 

4 COURT JUDGMENTS.’’. 

5 (b) MEASURES WITH RESPECT TO STATE-OWNED

6 CORPORATIONS OF JUDGMENT EVADING FOREIGN

7 STATES.—If any judgment evading foreign state remains 

8 in default on any final judgment for more than 3 years, 

9 regardless of whether such judgment became final before 

10 the date of the enactment of this Act, the Securities and 

11 Exchange Commission shall— 

12 (1) take all necessary measures to deny any 

13 state-owned corporation of a judgment evading for14 eign state access to the United States capital mar15 kets, including the ability to issue debt, equity or 

16 other securities, or borrow money, unless the pro17 ceeds of such borrowing of securities issuance are to 

18 be used, in the first instance, to satisfy in full all 

19 final judgment against its parent judgment evading 

20 foreign state; and 

21 (2) require that all periodic filings made by 

22 each state-owned corporation of a judgment evading 

23 foreign state with the Securities and Exchange Com24 mission under the securities laws bear the following 

25 legend prominently on the cover page: ‘‘WARNING: 


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1 THIS REPORT IS SUBMITTED BY A STATE2 OWNED CORPORATION OF A FOREIGN 

3 STATE THAT HAS BEEN DETERMINED BY 

4 THE DEPARTMENT OF THE TREASURY TO 

5 BE A JUDGMENT EVADING FOREIGN STATE 

6 BASED UPON ITS FAILURE TO SATISFY 

7 OUTSTANDING UNITED STATES COURT 

8 JUDGMENTS.’’. 

9 SEC. 7. REQUESTS FOR AID OR ASSISTANCE FROM JUDG10 MENT EVADING FOREIGN STATES. 

11 (a) BILATERAL ASSISTANCE.—If any proposal is 

12 made to a department, agency, or other instrumentality 

13 of the United States Government to extend aid, a loan, 

14 or any other form of assistance to a judgment evading for15 eign state, the head of the department, agency, or other 

16 instrumentality may not consider the proposal unless it 

17 prominently bears the legend set forth in subsection (c). 

18 (b) MULTILATERAL ASSISTANCE.—If any proposal is 

19 made to an international organization to extend aid, a 

20 loan, or any other form of assistance to a judgment evad21 ing foreign state, the Secretary of State shall provide to 

22 Congress prompt notice of such proposal that prominently 

23 bears the legend set forth in subsection (c). 

24 (c) LEGEND.—The legend set forth in this subsection 

25 is the following: ‘‘REQUEST FOR GRANT–IN–AID OR 


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1 LOAN BY A JUDGMENT EVADING FOREIGN 

2 STATE.’’. 

3 SEC. 8. REPORTS; RECOMMENDATIONS OF ADDITIONAL 

4 MEASURES. 

5 (a) ANNUAL REPORTS TO CONGRESS.—Not later 

6 than January 31 of each year, the Secretary of the Treas7 ury shall submit a written report to Congress that— 

8 (1) identifies each judgment evading foreign 

9 state; and 

10 (2) for each such judgment evading foreign 

11 state— 

12 (A) quantifies the impact on the United 

13 States economy, and cost to United States tax14 payers, of the unsatisfied final judgments out15 standing against the judgment evading foreign 

16 state; and 

17 (B) describes all measures that the Sec18 retary of the Treasury and the Securities and 

19 Exchange Commission have taken in the pre20 ceding year to carry out this Act. 

21 (b) CONSIDERATION OF DOCUMENTS AND OTHER IN22 FORMATION.—The Secretary of the Treasury may con23 sider documents and other information received from third 

24 parties and from judgment evading foreign states in pre25 paring each report submitted under subsection (a). 


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1 (c) TERMINATION OF DESIGNATION.—If the Sec2 retary of the Treasury, after evaluating documents and 

3 other information received from third parties and from a 

4 judgment evading foreign state, determines that the judg5 ment evading foreign state should no longer be classified 

6 as such, the Secretary, in the next annual report to Con7 gress under subsection (a), shall certify that the require8 ments and prohibitions under this Act no longer apply to 

9 such foreign state or to any state-owned corporation of 

10 such foreign state. 

11 (d) OTHER PUBLIC REPORTS TO INCLUDE INFORMA12 TION ABOUT JUDGMENT EVADING FOREIGN STATES.— 

13 The Secretary of State, the Secretary of the Treasury, and 

14 the Secretary of Commerce shall each reference the find15 ings of the Secretary of the Treasury from the Secretary’s 

16 most recent annual report to Congress under subsection 

17 (a) relating to the unsatisfied final judgments outstanding 

18 against the judgment evading foreign state in every report 

19 prepared for the public relating to the country risk or in20 vestment climate of such judgment evading foreign state. 

21 (e) ADDITIONAL MEASURES.—The Secretary of the 

22 Treasury shall submit written recommendations to Con23 gress regarding additional measures to further the pur24 poses of this Act. 

Æ 


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